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Today one of the most important steps for your business idea begins: You’ll think about how to “simulate” your offer in such a way that potential customers have the impression that they can already buy it.
Key takeaway: It’s critical to ensure that your offer will produce enough buyers in the market as early as possible. And the only way to find out is to force people to make a real purchase decision.
Unfortunately, it’s not enough to ask people for an assessment, like: “Imagine that this product is already finished. Would you be willing to buy it, and how much would you be willing to pay?” People are usually just too nice, and many will tell you what you want to hear: “Oh yes, I can imagine buying something like that. Maybe $20?” or: “Well, why not? Sounds quite good. How much would I be willing to pay? Well, maybe $10 to $15 maximum – I’m not sure.” But if they actually see your offer in the shop, without your personal approach, they’d rather spend their money on something else.
Here is a little story about it:
When Sony launched the Walkman in 1979, they considered what color the device should be. They decided to do a test with potential customers and showed them the device in three colors: black, silver, and yellow. The testers were asked which one they liked best, and the majority chose the yellow device. When they left the room after the interview, they could choose a Walkman at a table as a thank you. Contrary to their own statements, a great majority decided on the black one …
So, now your creativity, cleverness, and courage are required: What could you tell and/or show to your potential customers so that they are convinced that they can buy your product or service now?
Four examples of simulating an offer first
Example 1: Culture Farm for families and people interested in culture
Tatiana had the idea of opening a “culture farm:” to convert an old farmhouse into a café with small regional vegetarian snacks, a culture room for small concerts and readings, and many play facilities for children. She wanted to manage the organization and childcare while handing over the other tasks (café operation, vegetarian food, and cultural program) to others who also wanted to become independent. Her target group is urban families with medium-to-high income and people interested in culture, for whom sustainability is important. She had already found a good location near a suitable district in Hamburg and wanted to check out how the target customers received the idea.
For this purpose, she had flyers designed and 500 copies printed for $100. The flyer illustrates a beautiful farm with families having a relaxed coffee and eating cake while children play in the garden. A second picture shows a concert by a trio in a cozy, intimate atmosphere with candles on the tables.
The flyer lists the five most important points: “Coffee specialties and homemade cake,” “regional and fresh cuisine,” “play opportunities for young and old,” “colorful cultural program,” “romantic farm in the middle of nature.”
But the most important point is a corner of the flyer that says:
Voucher for $30 on your first visit for all food, drinks, and events.
Therefore, the flyer represents a value voucher, an opening offer at a reduced purchase price of $10.
Example 2: Yoga studio in an industrial park
To test the demand for the yoga studio, it’s enough for Marie to design a nice retractable banner (approx. $50) and have it printed (approx. $40) as well as print out a few contracts.
The retractable banner is designed to show a nice picture of a yoga class in a wonderful atmosphere (approx. $10) as well as the three most important features, for example:
- Healthy & fit with only 1 hour/week
- Course times adapted to your working hours
- Located only two minutes away
The contract is only one page long and includes the most important customer data, and describes the various offers, including prices. This means that customers can already register for a course.
Marie approaches the HR departments of various companies to explain her offer. Usually, there is one person responsible for employee health programs. Marie makes an appointment with this person to clarify further details relevant to both parties.
Marie explains that she’d like to set up a small stand over a few days to explain the idea of her yoga health care to employees and to better understand their needs. So, she openly admits that she’s still in the development phase and wants to make sure that the offer appeals to the employees and fits their needs. Most companies are amenable to this because they’re also interested in ensuring the offer suits their employees’ needs.
Example 3: Selling wool and knitting patterns for children on the Internet
Stefanie wants to turn her hobby into a profession and start a website for selling wool and knitting patterns for children on the Internet. To test the demand for knitting patterns for children and the wool that goes with them, it’s sufficient for Stefanie to first set up a simple sales website (cost approx. $500), offer the first packages of patterns and wool, and run a Google Ads campaign for one week (cost approx. $200). User reaction or willingness to buy informs customer needs, which you then can use to modify your offer and your advertising messages. The wool for this test phase is purchased by the company itself only after customers have ordered; the knitting samples are printed out at the printer and sent by post.
Example 4: Pre-prototyping an invention: It can be done even earlier!
Surely, you’re familiar with the term “prototype.” A prototype is a thing that serves as a model for other, similar things or a preliminary copy for later mass production. Often you try to build a functional prototype of an idea with a lot of money and effort to test how it will be received.
A more radical approach is so-called pre-prototyping. Here, an attempt is made to simulate that the prototype can already do something, but which was not realized due to lack of money or time.
Here is an example: I wanted to develop and market a new technology that allows presentations to be controlled by gesture (e.g., “swiping the air”). To test how this idea is received by the audience, the presenter, potential customers, or even investors can use the following trick:
I invite people into a room with a projector and a screen. Then I present a small black plastic box and explain that it’s a prototype of a new, revolutionary technology. I start my laptop, explain that the prototype is now connected to the laptop via Bluetooth, and start a PowerPoint presentation. Now I swipe in the air to the left and right, and indeed as if by magic, the presentation jumps back and forth, obeying my hand gestures. Then I ask an audience member to come forward and explain the gestures to them. When they try it, the prototype works perfectly and obeys the spectator via word or hand.
Now I’m ready for feedback. What does the audience think of the presenter’s hand gestures? How do I feel? Are potential customers interested in the technology? Do the investors want to invest in the idea?
When I have all my answers, I reveal the secret: The plastic box is completely empty. In fact, a colleague of mine sat in the back row and controlled the presentation with a standard beamer control so that nobody saw it. We simulated the idea together and, thanks to the plastic box on the table, gave the impression that the product was already finished.
If feedback was rather negative, we’d drop the idea altogether and have thus saved months of work and many thousands of dollars. Positive feedback would mean we’d have a higher certainty that the idea is worth investing further. Ideally, we already secured the first customers and investors who want to participate.
So, now it's your turn; here's your task:
How can your offer be presented convincingly with minimal time, effort, and money as possible? Be creative and dare to think “out of the box.” This step differentiates entrepreneurs who break new ground from employees who only function within a confined space of possibilities.